Japan shoppers brace for tax hike after years of deflation

TOKYO (AFP) - Japan is bracing for its first sales tax rise in years, with last minute shoppers buying up a host of goods from gold to ice cream, as the government tries to tackle its crushing national debt.

Millions of shoppers are making a mad dash to stores ahead of Tuesday's tax rise to 8.0 per cent from the current 5.0 per cent amid fears the increase could spark the return of a protracted economic slump.

The last time Japan brought in a higher levy in 1997, it was followed by years of deflation and tepid economic growth.

The upcoming hike has created a tricky balancing act for Prime Minister Shinzo Abe as he tries to nudge the world's number-three economy out of the cycle of falling prices and lacklustre growth with a growth blitz dubbed Abenomics.

A customer checks products at a shop in Chiba, suburban Tokyo on March 29, 2014. Japan is bracing for its first sales tax rise in years, with last minute shoppers buying up a host of goods from gold to ice cream, as the government tries to tackle its crushing national debt. -- PHOTO: AFP